Gold resumes near-term downslide, weighed down by stronger USD

Gold faded a bullish spike to $1328, led disappointing US monthly retail sales data, and turned sharply lower to currently trade close to session low around $1318 level. 

Having snapped five days of losing streak, the yellow metal attempted to build on to Wednesday's recovery gains on disappointing US economic data and a broadly weaker greenback, as measured by the overall US Dollar Index.

The recovery, however, lost upside momentum and the metal resumed with its near-term downward trajectory as markets remained convinced that the Fed might still go ahead and raise interest rates at-least once during 2016, which boosted the greenback and is seen weighing on the non-yielding precious metal. 

Focus now shifts to the release of US CPI print for August, scheduled for release on Friday, for fresh inputs over possible Fed monetary policy stance at its meeting on September 20-21, which would be a key determinant for the greenback's near-term trajectory and would eventually drive dollar-denominated commodities - like gold.

Technical levels to watch

On a sustained weakness below $1315 (weekly low support), the commodity is likely to accelerate the downslide immediately towards $1308 en-route 100-day SMA support near $1305 region.

On the flip side, $1325-28 region now becomes immediate strong resistance above which the metal seems to extend its recovery trend initially towards $1330 and further towards $1340 level.